Reform local extrabudgetary funds in Egypt: lessons from China

Abstract

This thesis research project â Reforming local extrabudgetary funds in Egypt: Lessons from Chinaâ was supervised by Jennifer Bremer and Khaled Zakaria Amin, and submitted to the American University of Cairo by Domenica Gräfin von Preysing-Lichtenegg-Moos. It engages with the question of how to reform local extra-budgetary funds (EBFs) in Egypt, in explicit recognition of their high costs and risks to good budget governance, as well as their potential both, to boost local needs-based development now and, in the mean time, to provide a valuable testing ground for fiscal decentralisation reforms in the future, as the experience of China demonstrates. Progressing analytically from the general to the specific, this research starts by extracting general lessons from comparing and contrasting international public finance advice on EBFs with the experience of China in the context of national fiscal decentralisation reform since the 1980s. These provide the foundation for a SWOT analysis of the local EBF governance framework in Egypt. The final section applies both transferrable international lessons learned and national insights gained to the case of governorate-level local services and development account management, and develops short-term reform recommendations. The conclusion synthesises this research project's findings into a single local EBF reform strategy outline for Egypt. Findings are based on a review of the public finance literature on EBFs and on the Chinese experience, a review of the pertinent Egyptian legislation and literature, and structured, open-ended interviews with stake holding senior Egyptian officials and researchers.